Why are debt collection agencies used?
Debt collection agencies play a vital role in the UK economy, helping to ensure that bills are paid for products and services that have been provided. Last year, the debt collection industry returned £5bn to the economy and Government departments. Debt collection agencies are used by organisations of all shapes and sizes, from financial institutions seeking outstanding payment from customers, to small businesses chasing late payments from their customers and the Child Support Agency looking out for the financial well-being of its wards.
How do you work with regulatory organisations?
Compliance with the regulatory framework is fundamental to all aspects of 1st Credit’s operations. We work hand-in-hand with the Office of Fair Trading to ensure that we comply with their requirements and help drive industry best practice. We believe that continually raising standards is not only positive for our business, but also the right thing to do.
Does 1st Credit adhere to the OFT’s Debt Collection Guidance?
Yes, we are fully compliant. Since the OFT renewed our licence in February, another of our subsidiary companies, Connaught, was licensed in June, demonstrating that regulatory compliance is of paramount importance to the way we operate on a day-to-day basis.
How have you raised standards?
We constantly review our processes. In the past year, we have continually strengthened our compliance procedures and significantly advanced the knowledge and skills of all our staff. In particular, we make sure that we engage with all individuals in a professional manner, tailoring our approach to suit individual circumstances. This ensures that we strike a balance between clear negotiation if payment is refused, and advice about repayment schemes and support available where evidence of financial difficulty or vulnerability is clear.
When do you issue statutory demands?
A statutory demand is one of a number of alternatives available to pursue an unpaid debt legally. It is a very serious procedure that leads to bankruptcy proceedings if a prior arrangement has not been agreed. Although we issue fewer statutory demands than in the past, they are still necessary in some cases. These cases are typically where, after numerous efforts on our part, the individual is still not willing to engage with us financially, despite having the ability to do so. Once a statutory demand has been issued, we expect to work through to a bankruptcy order, unless the individual’s circumstances have changed or we have entered into a mutually agreeable financial arrangement. We do not issue statutory demands lightly.
Under what circumstances do you discuss legal action?
Those of us in debt should clearly know our rights and responsibilities within the UK regulatory framework and agreed guidelines.We make individuals aware of possible legal procedures where appropriate to do so, and in specific connection to their own circumstances.It is not a threat. Rather, it is an effort to fully inform and help individuals decide on their most appropriate course of action.
How do you deal with sensitive cases?
We work hard to ensure that all cases are handled in line with individual circumstances. This is particularly true of sensitive and vulnerable cases. All such cases are quickly transferred to a specialist team which has a broader set of guidelines better suited to these situations.
How do you work with the free advice sector?
1st Credit works closely with organisations such as Citizens Advice and Payplan to make sure that we fully understand the circumstances behind individual cases, vulnerable or otherwise. Together, we agree sensible arrangements that are fair and fitting.
What do I do if I find myself in financial difficulties?
The first thing to do is admit there is a problem. Be clear about how much you owe and explain your circumstances to your lender or debt collection agency such as 1st Credit. The quicker you engage, the quicker the problem can be managed. The worst thing you can do is ignore the problem or hide, which will only make the situation more difficult.
